What ID Theft Services Can and Can't Do

Andrea Ferrero teaches young people about finances which unfortunately also includes learning about identity theft. She should know, Andrea had her identity stolen a few years ago.

But Andrea was lucky.

She had enrolled in an identity theft protection service, which quickly informed her that someone had used her info to get a large amount of credit in her name.

"They walked me through the steps to take to dispute the line of credit that had been opened and take care of that," Ferrero said.

But before you enroll in one of these services, Consumer Reports says know what you're actually buying. Some people assume ID protection services will prevent identity theft in the first place. But that's not true.

"Consumers pretty much have to accept that criminals can get their hands on your personal information no matter what you do. The key is to spot fraudulent activity quickly and then do what you have to do to stop it," said Margot Gilman, Consumer Reports Money Editor.

ID Theft protection services like Andrea's can help you dispute fraudulent transactions with your bank, credit card companies and other businesses after your identity has been stolen, typically for a fee of about $10 to $30 a month.


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The best way to avoid being a victim of this type of new-account fraud you can do yourself. Freeze your credit with the major credit bureaus, Equifax, Experian and Transunion. It's free, and no one will be able to open credit, including you, until you unfreeze it.

But keep in mind freezing your credit won't prevent all ID theft. For instance, a criminal can still use your personal information to get medical services or steal your tax refund.

"It's critical that consumers themselves keep a careful eye on their financial world, bank and credit card statements obviously, but also medical records, insurance records, tax records," said Gilman.

Consumer Reports says if you're considering signing up for ID theft protection, ask a lot of questions, some companies may cover very little or simply hand you a do-it-yourself credit repair checklist.

Another thing you should do yourself in any case, check your credit report free once a year with the three credit bureaus to spot any suspicious activity.

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